TAIPEI — Samsung Electronics’ plan to spin off foundry operations from the system LSI division is expected to increase Samsung’s share of global contract chipmaking at the expense of Taiwan Semiconductor Manufacturing Co. (TSMC) and smaller rivals.
Samsung's chip operations, consisting of memory and system LSI, will be split into three, making the foundry business an independent unit, according to the Korea Economic Daily.
The separation of Samsung’s contract chipmaking from its branded semiconductor business would remove a conflict of interest with potential customers such as Nvidia and MediaTek, and create a new threat to dedicated foundries such as TSMC, according to analysts such as Andrew Lu.
“A share gain by Samsung Foundry will be inevitable,” Lu said in a report written for intelligence provider Smartkarma.
During the next five years, Samsung Foundry is likely to gain 2 percentage points per year increasing from its current 8 percent share of the global foundry business, according to Lu. As a result, TSMC may lose about 1 percentage point annually of the nearly 60 percent share it holds, he said. Smaller rival Globalfoundries should be affected the most because Samsung and Globalfoundries' 14nm FinFET processes are compatible, and the 28nm nodes of the current partners are similar.
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